The Bank of England is out with its annual report and it contains comments from MPC members Clare Lombardelli and Alan Taylor. They highlight the differing vies on the path of policy as the market prices in about a 35% chance of a 25 bps cut this year.
Lombardelli
- I’m not confident that if we cut rates much further that we will be sufficiently restrictive to return inflation to target sustainably
- Labour market loosening has been from a very tight starting point, so could still be reflecting normalisation rather than the emergence of slack
- I voted to hold rates at the last meeting due to my concerns about above-target and underlying inflation
- I’m not confident that there is a margin of slack in the economy
Taylor
- I want to maintain restrictiveness as long as necessary but not longer
- The greater danger is that we get behind the curve and stay too tight in the short term
- We are in a fragile moment for the economy
This article was written by Adam Button at investinglive.com.
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